The Supreme Court held that a messenger paid on a “per-piece basis” could still be considered a regular employee with security of tenure, emphasizing that the manner of payment does not negate regular employment if the work performed is necessary for the company’s business and has been ongoing for a significant period. Consequently, the employer’s failure to comply with due process requirements in terminating the employee’s services constituted illegal dismissal.

From Per-Piece Pay to Permanent Status: Did the Bill Sender Corporation Illegally Terminate a Messenger’s Employment?

The case revolves around Reynaldo S. Geraldo, who worked as a delivery/messenger man for The Bill Sender Corporation, tasked with delivering bills for the Philippine Long Distance Telephone Company (PLDT). Geraldo’s compensation was on a “per-piece basis,” meaning he was paid for each bill he successfully delivered. After working in this capacity for over fourteen years, Geraldo was suddenly informed by the company’s operations manager that his employment was terminated due to alleged failure to deliver certain bills. Geraldo contested this termination, arguing that it was illegal because it lacked due process and that he was not even assigned to deliver the undelivered bills in question. The company, however, maintained that Geraldo was not a regular employee but a piece-rate worker who worked only when he pleased, and that he abandoned his job by no longer reporting for work. The central legal question is whether Geraldo, despite being paid on a per-piece basis, should be considered a regular employee with security of tenure, and whether his termination was lawful.

The Labor Arbiter (LA) initially ruled in favor of Geraldo, declaring that he was indeed a regular employee and that the company failed to prove a just cause for his dismissal or that Geraldo abandoned his job. The LA emphasized that under Article 277(b) of the Labor Code, the burden of proving just cause for dismissal lies with the employer. The LA also pointed out that Geraldo’s work was essential to the company’s business, and his long tenure further solidified his status as a regular employee. The National Labor Relations Commission (NLRC) affirmed the LA’s decision, underscoring the company’s failure to observe the twin-notice requirement to ensure due process. The NLRC also dismissed the company’s abandonment claim, noting that Geraldo filed his complaint within a reasonable time frame.

However, the Court of Appeals (CA) reversed the NLRC’s decision, arguing that since Geraldo was paid on a per-piece basis, he was hired on a per-result basis and not an employee of the company. The CA highlighted the practice of messengers transferring between companies based on the availability of work, implying a lack of a formal employer-employee relationship. Consequently, the CA found no basis for awarding separation pay, backwages, and other monetary benefits. This ruling led Geraldo to file a petition for review on certiorari with the Supreme Court, asserting that his status as a piece-rate employee did not negate his right to security of tenure as a regular employee.

The Supreme Court, in its analysis, focused on the definition of a regular employee under Article 280 of the Labor Code, which includes those engaged to perform activities necessary or desirable in the usual business or trade of the employer. The Court cited Integrated Contractor and Plumbing Works, Inc. v. National Labor Relations Commission, where it was held that the test is the reasonable connection between the employee’s activity and the employer’s business. The Court noted that Geraldo’s role as a delivery/messenger man was directly linked to the company’s business of delivering bills, making his services indispensable. Therefore, the fact that Geraldo had been performing these activities for over fourteen years further solidified his claim to regular employment status.

The Supreme Court rejected the company’s argument that Geraldo was merely a piece-rate worker, citing Hacienda Leddy/Ricardo Gamboa, Jr. v. Villegas, which clarified that payment on a piece-rate basis does not negate regular employment. As the Court stated, the term “wage” is broadly defined in Article 97 of the Labor Code as remuneration or earnings, whether fixed or ascertained on a time, task, piece or commission basis. Payment by the piece is just a method of compensation and does not define the essence of the relations. It emphasized that the nature of the activities performed, rather than the method of payment, determines the regularity of employment.

Having established Geraldo’s status as a regular employee, the Court then examined whether his dismissal was lawful. The Court reiterated the established principle that in illegal dismissal cases, the burden of proof lies with the employer to prove just cause. The company claimed that Geraldo abandoned his job, but the Court found no evidence to support this claim. The Court noted that to justify a finding of abandonment, there must be proof of a deliberate and unjustified refusal to resume employment, accompanied by manifest acts indicating a desire to discontinue employment. The filing of the illegal dismissal complaint itself negated any intention of abandonment on Geraldo’s part.

Furthermore, the Court found that Geraldo’s dismissal did not comply with the due process requirements mandated by law. The twin-notice rule, requiring two written notices to the employee, was not observed by the company. The first notice should inform the employee of the specific acts or omissions for which dismissal is sought, and the second notice should inform the employee of the employer’s decision to dismiss him. The company’s failure to provide any written notice constituted a violation of Geraldo’s right to due process.

As the Court stated, the employer must first furnish the employee with two (2) written notices: (a) notice which apprises the employee of the particular acts or omissions for which his/her dismissal is sought; and (b) subsequent notice which informs the employee of the employer’s decision to dismiss him/her. Because the company failed to comply with the substantial and procedural requirements of the law, the Court concluded that Geraldo was illegally dismissed from his employment. The Court thus sustained the award of separation pay, attorney’s fees, and other monetary claims.

The Court clarified, however, that respondent Cando, as President of the company, could not be held personally and solidarily liable for Geraldo’s monetary claims. The Court recognized the principle that a corporation has a separate legal personality from its officers and stockholders. To pierce the corporate veil and hold a corporate officer liable, it must be shown that the corporate personality was used to perpetuate fraud or an illegal act, or that the officer acted with malice or bad faith. In this case, there was no evidence to show that Cando acted with malice or bad faith in terminating Geraldo’s employment.

FAQs

What was the key issue in this case?	The key issue was whether a “per-piece basis” messenger should be considered a regular employee and whether his termination was legal. The Supreme Court ultimately ruled in favor of the employee, emphasizing the significance of the work’s nature and duration.
What is a regular employee under Philippine law?	A regular employee is one engaged to perform activities necessary or desirable in the usual business of the employer. This includes those who have rendered at least one year of service, even if the performance is intermittent.
Does being paid on a “per-piece basis” mean you are not a regular employee?	No, being paid on a “per-piece basis” does not automatically disqualify you from being a regular employee. The Supreme Court has clarified that the method of payment does not define the essence of the employment relationship.
What is the twin-notice rule?	The twin-notice rule requires employers to provide two written notices before terminating an employee: one informing the employee of the grounds for dismissal and another informing them of the decision to dismiss. This is a critical component of due process.
What is abandonment of work?	Abandonment of work is the deliberate and unjustified refusal of an employee to resume their employment, coupled with a clear intention to sever the employment relationship. Mere absence is not sufficient to prove abandonment.
Who has the burden of proof in illegal dismissal cases?	In illegal dismissal cases, the burden of proof rests on the employer to demonstrate that the dismissal was for a just and valid cause. This is a fundamental principle in Philippine labor law.
Can corporate officers be held liable for illegal dismissal?	Corporate officers can be held solidarily liable with the corporation for illegal dismissal if the termination was done with malice or bad faith. This requires showing that the officer assented to patently unlawful acts of the corporation.
What is separation pay?	Separation pay is a monetary benefit awarded to employees who are terminated for causes other than serious misconduct or those due to retrenchment or redundancy. It serves as a form of compensation for the loss of employment.
What are the remedies for illegal dismissal?	The remedies for illegal dismissal typically include reinstatement (or separation pay if reinstatement is not feasible), backwages, and attorney’s fees. These remedies aim to compensate the employee for the damages suffered due to the unlawful termination.

This case underscores the importance of due process and the rights of employees, even those compensated on a per-piece basis. It serves as a reminder that the nature of the work performed and the duration of employment are key factors in determining regular employment status under Philippine law.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: REYNALDO S. GERALDO vs. THE BILL SENDER CORPORATION/MS. LOURDES NER CANDO, G.R. No. 222219, October 03, 2018